Master’s Degree in Business Psychology

The single fastest growing occupation in the United States, according to data collected by the Bureau of Labor Statistics, is industrial-organizational psychologist. Indeed, it is predicted that over a ten-year period, between 2012 and 2022, the market for industrial-organizational psychologists will expand by an impressive 53 percent, due to businesses investing more resources into sophisticated efforts to “keep employees, increase productivity, and improve office morale.”

What is industrial-organizational psychology? In the simplest terms, it’s what used to be called business psychology, and it’s what happens when you combine a knowledge of business administration with the analytical tools and methodologies of psychology in order to better understand the way that companies function. As the Society of Industrial and Organizational Psychology (SIOP) explains in its mission statement, industrial-organizational psychology (also known as I-O or I/O psychology), “is the scientific study of the workplace. Rigor and methods of psychology are applied to issues of critical relevance to business, including talent management, coaching, assessment, selection, training, organizational development, performance, and work-life balance.”

As that description suggests, it takes highly specialized skills and knowledge to pursue a career in the growing field I-O psychology, the kind of in-depth training and expertise that most often comes with an advanced degree. In fact, a survey of the field conducted by the American Job Center Network’s ONet Online, indicates that jobs in the realm of business psychology are roughly split between those with master’s degrees in business psychology and those with doctoral or even post-doctoral training in the discipline — 47 percent have master’s degrees, and 53 percent hold some form of doctoral degree. In this guide, we’ll take an in-depth look at master’s degree programs in business psychology and their relation to I-O psychology; the course of study that can lead to a job in the field; and the job prospects and salary outlooks for those currently entering the marketplace as psychologists trained to use their skills in a business environment.

Why Pursue a Master’s Degree in Business or I-O Psychology?

It’s no secret that deep insights into the workings of the human mind and human behavior, the two core areas of focus in psychology, are crucial ingredients in almost any recipe for business success, whether it’s in the tech sector or the service industry. Understanding the thinking that fuels what customers want, how to maximize efficiency by insuring that employees are happy and productive, and what it takes to manage the various personalities that form a company’s identity aren’t just abstract concepts, they’re daily imperatives.

This isn’t necessarily a new idea. As American industrialism entered the modern era, the name Dale Carnegie became synonymous with success in business, thanks to his classic formative book on the psychology of business, the 1936 best-seller How to Win Friends and Influence People. That book helped formalize the now obvious links between business and psychology, and the bond between the two disciplines has only grown stronger over the decades. Today, you’ll find newspaper features on the “personality” of brands; business journal lists of must-reads for CEOs like Stanford University psychologist Carol Dweck’s highly touted 2007 book Mindset: The New Psychology of Success; and viral TED Talks on psychological business strategies. If the 20th century was about industrialization, automatization, and maximizing the efficiency of the production line, then the focus has shifted in this new millennium toward harnessing the science of behavior to create products and services that are more psychologically appealing in companies that are more attuned to the workings of the human mind.

Those are some of the reasons that business and I-O psychology has become such a hot field, with a growing number of on-campus and online master’s degree programs dedicated to the discipline, and even some emerging bachelor’s degree cross-disciplinary majors that blend business coursework with classes in psychology. That means that in an area of study that used to be reserved for PhD candidates, and post-doctoral study, it is now increasingly possible to begin on a track toward a career in I-O psychology with a master’s degree program in business psychology that builds upon a foundation of undergraduate coursework in psychology and business.

Who is the Right Fit for a Master’s Degree in Business or I-O Psychology?

The basic entry requirement for a master’s degree program in business psychology is a bachelor’s degree, and while it can be helpful to have either a bachelor of arts (BA) or a bachelor of science (BS) in psychology, it isn’t an absolute requirement. A major in business, communications, sociology, or a related social/behavioral science, along with some foundational coursework in psychology, can be sufficient.

What is perhaps more important at the undergraduate level is to insure that you’ve developed your writing and communication skills, and have acquired the analytical thinking and problem solving strategies that are so crucial in the practice of psychology. As the American Job Center Network’s ONet Online points out, oral and written comprehension and expression, deductive reasoning, an ability to organize and analyze data, and creative thinking are all crucial components for success in business psychology.

Choosing the Right Program: MA vs. MS in Business Psychology

Master’s degree programs in business psychology and I-O psychology come in two basic forms: the master of arts (MA) and the master of science (MS). Both are essentially parallel courses of study designed to be completed in two to three years. And both represent an area of specialization within the larger realm of psychology, which means these programs in business or I-O psychology are often part of a larger master’s in psychology programs. But, just as there are different areas of emphasis from program to program, there are some variations in MA and MS curricula, specifically in the way the programs are designed.

An MA in psychology can indicate a stronger focus on the academic and philosophical nature of business psychology, as well as on the practice of psychological counseling. An MS in psychology might be more targeted toward the science of brain function and research in psychology. This can be a significant difference in some areas of psychology, such as social psych counseling, where licensing is a big issue, and an MA may be preferable. However, in the realm of business psychology, which often doesn’t require state licensure, the MA or MS can be adequate preparation for either further study in a doctoral program or for embarking on a career in the business world.

Master’s in Business Psychology Core Classes

Master’s in Business Psychology Elective Classes

Areas of Specialization in Master’s of Business Psychology Programs

Every master’s degree program offers different elective courses, and each of these target different areas of specialization in the field. A good MA or MS in I-O psychology will give students the opportunity to sample from among the most popular of these, which include healthcare administration, business consulting, marketing research and strategies, and organizational development. The best programs will also include independent research, study, and fieldwork options, as well as some kind of culminating master’s seminar that can include a thesis of some kind. Since each program has its own requirements, it’s best do a thorough examination of these things before applying. However, it’s also worth reiterating that business or I-O psychology is in and of itself a specific area of specialization within psychology, so the skills and knowledge garnered from a solid master’s degree program in business psychology should be adequate preparation for most workplace challenges.

Career Options, Salaries, and Job Outlook

As we mentioned earlier, I-O psychology tops the BLS charts for fastest growing occupations up through 2022. And, the most recent BLS Occupational Employment Statistics for I-O psychologists looks rather promising as well: The average annual salary in the field according to May 2014 data was $90,070. We’ll look at how that compares to other careers in psychology and related fields in business and counseling below. First, there is one caveat: Because it’s still a relatively young and small field, there’s impressive room for growth in the I-O sector of psychology, but, as the BLS points out, “the fast employment growth will result in only about 900 new jobs over the 10-year period.” So, it is a competitive field, and one in which the qualifications that come with a master’s degree can be a distinct advantage in the job market.

As the APA points out, in addition to holding academic positions at colleges and universities (jobs usually reserved for doctoral program graduates), I-O psychologists “are qualified as trainers, facilitators, assessors, coaches and consultants. I/O psychologists may also work directly in an organization’s human resources department, or they may act as independent consultants, called into an organization to solve a particular problem.” In other words, it’s a brave new world out there for psychologists who are trained in business psychology, and newly minted master’s degree candidates are expanding the boundaries of what’s possible in the field.